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The news from Ukraine is more depressing by the day. We must hope that something happens to bring an end to the fighting as soon as possible. NATO and the EU have few options: at the moment much faith is being placed in economic sanctions.
The record of sanctions in the past has been mixed, however, and economists have not always been convinced that they are effective in hitting the people they should be hitting.
An interesting new paper in the latest Economic Affairs, the journal I edit on behalf of the IEA and the University of Buckingham, sheds some new light on this issue. Argentinian economist Fernando Gonzalez surveys sanctions against Latin American countries since 1950. He finds that they reduce investment and growth significantly but tend to worsen inequality, as the poor are hit hardest.
Economic Affairs began under the editorship of the great Arthur Seldon – who generously accepted my own first halting contribution as long ago as 1982. Nowadays it’s a more academic journal than it used to be, with all articles fully refereed as best practice dictates. My colleague Michael James and I try, however, to make all articles as accessible as possible to a worldwide audience.
Authors vary in their approach and in their methodologies, but the journal now probably offers the best opportunity anywhere on the planet for classical liberal and free market-sympathising economists to publish serious academic work. We have published authors from dozens of countries, including even Russia and China.
The current issue of the journal covers a range of topics from health economics, to propaganda in the war against terror, to cognitive economics. As a paid-for journal, many articles have to be behind a paywall.
But in this issue you can read for free former Bank of England Governor Lord (Mervyn) King’s take on recent monetary policy in a world of radical uncertainty here, former Labour Minister Ruth Kelly’s thoughts on social policy after Covid here, and Andrew Dunn’s excellent deconstruction of the idea of relative poverty here.
For light relief you can also read an article on professional cricket by Andy Stevens here, who compares today’s pyjama-clad sport with the predictions made by former IEA Director-General, the late John Blundell, in the 1980s.
Perhaps after these tasters you might consider subscribing to the journal, which is published three times a year. Follow this link for details of subscriptions (including special rates for students).
Professor Len Shackleton
Editorial and Research Fellow, Institute of Economic Affairs
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THE WILL TO DRILL?
Domestic energy policy is under increased scrutiny, as households face eye-watering increases in their annual electricity and gas bills. Cheap domestic supply lies under our feet here in the UK, but there is no political will to extract it through fracking. Could recent events change this?
In her column for The Spectator, IEA Director of Communications Annabel Denham argued that the UK should learn from the US fracking revolution and use our vast resources to produce cheaper domestic gas, ending our reliance on costly imports and reducing our dependency on foreign powers like Russia.
In her column for Conservative Home, IEA Head of Media Emily Carver argued that as Russia continues its assault on Ukraine and inflation surges, the government must do more to alleviate the cost of living crisis.
While delaying or scrapping the unpopular National Insurance Contributions rise would be welcome, there is a need for longer term thinking. Planning reform and reprioritising domestic energy security will be essential.
And quoted by City AM, IEA Energy Analyst Andy Mayer argued that oil giants such as Shell and BP will have to take the financial hit for exiting lucrative arrangements, because Kremlin-backed partnerships can no longer be relied on.
He said: “Regimes that treat trade and contracts as exploitable evidence of Western fragility, rather than a source of mutual advantage, cannot be trusted. However painful, these deals must be terminated until there is a Russian administration, once again, that wishes to partner for peace and prosperity, rather than engage in expansionary wars of aggression against their neighbours.”
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COMMITTEE CORRIDOR
This week, three IEA staff gave evidence to select committees. IEA Head of Regulatory Affairs Victoria Hewson appeared before the International Trade Committee to discuss “level playing-field” provisions in the UK-Australia trade deal, relating to labour, gender and development issues.
Victoria argued that free trade agreements should not be used as a vehicle to entrench what are often contestable concepts in social policy and law, such as issues relating to sex and gender. You can watch here.
On Wednesday, Annabel Denham gave evidence to the Work and Pensions Committee on Universal Credit and childcare costs. Annabel argued that there is a strong case for deregulation, including loosening teacher-to-child ratios, to bring down costs for parents. Find out more here.
And IEA Head of Public Policy Matthew Lesh appeared before the Environment Audit Committee to give evidence on aligning the UK's economic goals with environmental sustainability. He debated the importance of economic growth with the Green Party's Caroline Lucas MP, arguing that as countries become more prosperous they have more resources to deal with environmental concerns. Find out more here.
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iN THE MEDIA
NHS waste... A government report has disclosed that pay of NHS senior managers has risen by 65 per cent in the past decade, dwarfing the rise seen by workers across the rest of the economy.
Quoted in The Telegraph, IEA Head of Lifestyle Economics Christopher Snowdon noted that:
"Protected from the discipline of the free market, the NHS’s near-monopoly on healthcare has allowed a culture of entitlement and extravagance to flourish. While the rest of the country endures a cost of living crisis, the public sector aristocracy continues to thrive".
Taxing times... This week, the Treasury launched a consultation into an Online Sales Tax, following concerns over a potential tax imbalance between in-store retailers and those online.
Quoted in The Times and Financial Times, Len Shackleton said such a tax would further complicate the system, and penalise a new form of commerce which benefits the consumer.
Len argued: "The idea that it should be introduced to offset the costs of brick-and-mortar retailers — premises and business rates — is irrational. It is like a tax on steam engines to protect horse-and-cart transport."
And writing for 1828 on the proposed tax, he argued it will do little, if anything, to reinvigorate our high streets.
Call off the strike... Annabel Denham appeared on GB News to discuss the London Underground strike. With more people working from home, and falling passenger numbers, Annabel argued tube drivers may have done more harm than good to their cause. You can watch highlights here.
Quoted by the Independent, Andy Mayer called the strike a "privileged attack by a highly-protected public sector elite on working people".
Culture control... IEA Head of Cultural Affairs Marc Glendening wrote for 1828 on Transport for London's (TfL) new poster campaign to eradicate ‘intrusive staring’ on the tube, which he worries is intended to create an atmosphere of psychological intimidation.
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ON THE IEA BLOG
Loyalty penalty... IEA Academic and Research Director Dr James Forder explored the implications of energy regulator Ofgem's decision to encourage all suppliers to offer existing customers the same deals available to new customers.
James argued that interference in tariff offers would act as an effective prohibition on new-customer discounts and "would remove a key means for energy firms to compete for customers". Read here.
Off the rails... In May 2021, the government announced the launch of Great British Railways (GBR), a new public body to oversee the operation of the railways in Britain. Professor Len Shackleton suggested that GBR, a throwback to the days of British Rail, will not fix the broken rail system.
He argued that profit-motivated companies are more likely to succeed in promoting innovation than bureaucrats, whether employed by the Department for Transport or GBR. Read here.
Book review... IEA Head of Political Economy Dr Kristian Niemietz reviewed 'Economics in One Virus', by economist Ryan Bourne.
Kristian noted that, despite a deluge of pandemic-related books being published in the last year, Ryan's book cuts through the noise by making an holistic observation of the pandemic and its impact on the economy. Bourne uses the pandemic as a vehicle to explain a wide range of economic concepts, from beginner-level to advanced. Read Kristian's review here.
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LOOKING FOR A NEW CHALLENGE?
The Vinson Centre at the University of Buckingham has developed a unique Professional Doctorate in Public Policy and Political Economy.
It is aimed at those who are working in any area of public policy or who have recently ceased working in public policy (for example, for a think tank, as a parliamentary researcher, for a charity or NGO or as a teacher or academic).
Unlike a traditional doctorate, it begins with a taught element. Students have to attend three study weekends over the course of their studies (and can attend more if they wish), but the taught element can be done largely be distance learning. Following the taught element, a thesis topic is chosen which must be related to some area of public policy. This thesis is somewhat shorter than a traditional PhD.
The programme leads to the title 'Doctor of Public Policy and Political Economy'. Further details can be found here. Students on related MAs or MScs at the University of Buckingham can transfer to the professional doctorate. If you start the professional doctorate and decide it isn’t for you, you can transfer onto a related Masters programme or exit with a postgraduate diploma.
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IEA PATREON
Thank you to all of you who have already signed up to become an IEA Online Patron. Becoming a Patron grants you VIP access to our latest videos, priority invites to our virtual events, and the opportunity to engage directly with IEA Director General Mark Littlewood and the IEA team. For just a small donation you can get all these benefits and more.
To visit the page and find out more about the IEA’s Patreon, follow the link here or watch our trailer here.
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IEA DIGITAL
The Swift Half... In this week's episode, IEA Head of Lifestyle Economics Christopher Snowdon interviewed Jason Miller, CEO of free speech social media platform Gettr, and former senior advisor to Donald Trump. They discuss his career, the Ukraine Crisis, and online threats to free speech. You can watch here.
The world of work... IEA Director of Communications Annabel Denham explains some of the key workplace trends that accelerated during the pandemic, as well as calls for more government intervention, including proposals for a four-day working week. You can watch here.
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CALLING ALL STUDENTS!
We are delighted to announce the launch of the 2022 Dorian Fisher Essay Competition. Named after the beloved wife of our founder Sir Antony Fisher, this is our biggest essay competition of the year, exclusively for A-Level and IB students.
First prize will receive £500, with a separate prize of £500 for the school with the highest number of entrants. The deadline for this year’s competition is Friday 29th July 2022. You can find out more here.
Sixth Form Future Thought Leaders’ Programme... You can also apply to attend a week-long programme for sixth formers which will take place from Monday 25 – Friday 29 July. The week will include lectures, discussions, and debates with expert economists.
Due to high demand, we are pleased to announce that an additional week of the Sixth Form Future Thought Leaders’ internship will also take place at the IEA between Monday 18 – Friday 22 July. This week-long programme for sixth formers is a way to get experience discussing economic ideas and concepts beyond the exam curriculum.
To apply, please send a CV and short covering letter to IEA Outreach Coordinator Thomas Robinson at [email protected] explaining why you would like to take part.
Residential Summer School... In partnership with the Institute of International Monetary Research, the Vinson Centre, and the Initiative for African Free Trade and Prosperity, the IEA will host a residential summer school.
This programme is open to undergraduate students and will take place from 27 June to 8 July. It will have four streams: general economics, monetary theory, economic history, and trade and globalisation.
Summer School Internship... Last but not least, our summer school internship will start from Tuesday 2 August – Friday 19 August. Interns will participate in lectures, seminars, debates, discussions, as well as workshops on professional and career development.
The deadline to apply for these programmes is 1 April. You can find out more about all of our internship programmes here, or email IEA Head of Outreach Brittany Davis at [email protected] with any questions.
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